Health and Human Services Announces Distribution Process for Second Tranche of Relief Fund Payments to Healthcare Providers under the CARES Act Provider Relief Fund
The CARES Act provided for $100 billion in emergency relief funds to hospitals and other healthcare providers. The payments to healthcare providers under the Provider Relief Fund (PRF) are not loans and do not need to be repaid if the recipient complies with the terms and conditions applicable to the distribution. A summary of the relief funding follows.
On April 10, 2020, the Department of Health and Human Services (HHS) began the initial infusion of $30 billion of the $100 billion PRF into healthcare system with most payments arriving via direct deposit. Payments were made to eligible providers, proportionate to providers' share of Medicare fee-for-service reimbursements in 2019.
On April 22, 2020, HHS announced the allocation of additional distributions under the PRF, and HHS began distribution of the remaining $20 billion of the $50 billion allocated to the PRF general distribution funds, commencing on April 24, 2020. According to HHS, this second round of distribution payments to the eligible providers was provided to augment their allocation so that the general distribution fund is allocated proportionate to those providers' share of 2018 net patient revenue.
On April 24, 2020, eligible providers who submitted cost reports were automatically sent an advance payment based on the revenue data they submitted in their Centers for Medicare & Medicaid Services (CMS) cost reports. Providers without cost report data on file will need to submit their revenue information to the HHS portal. Payments will go out weekly, on a rolling basis, as data submitted is validated, with the first wave being delivered beginning on April 24, 2020.
The online application portal for eligible providers without cost reports is now available on the HHS website. HHS Application Portal can be found here. Providers who have already received payments from the initial distribution of $30 billion are able to use the portal.
Some Initial Takeaways (as of April 27, 2020):
- The portal is only available to those TINs that already received funds under the initial distribution of the Provider Relief Fund.
- Providers must have submitted an attestation to the Terms & Conditions (T&Cs) for the first tranche in order to proceed with this application. They must also agree to the T&Cs as to the second tranche. As a result, providers need to make sure they are in agreement as to those terms. If providers receive a payment from the PRF and retain that payment for at least 30 days without contacting HHS regarding remittance of those funds, they are deemed to have accepted the T&Cs.
- Providers must confirm the amount of first payment.
- Providers must supply an estimate of lost revenue for March and April 2020.
- IRS tax returns need to be submitted.
- Providers agree to possible HHS audit in future.
- The T&Cs provide that the Recipient consents to the Department of Health and Human Services publicly disclosing the Payment that Recipient may receive from the Relief Fund. The Recipient acknowledges that such disclosure may allow some third parties to estimate the Recipient’s gross receipts or sales, program service revenue, or other equivalent information.
- More guidance as to the allocation among the applicants is needed.
Future Distributions as Targeted Allocations
The announcement by HHS also included information as to future distributions under the PRF referred to as “Targeted Allocations.” These include the following:
- Covid-19 High Impact Areas. $10 billion will be allocated for a targeted distribution to hospitals in areas that have been particularly impacted by the COVID-19 outbreak.
- Treatment of the Uninsured. A portion of the $100 billion Provider Relief Fund will be used to reimburse healthcare providers, at Medicare rates, for COVID-related treatment of the uninsured. Every healthcare provider who has provided treatment for uninsured COVID-19 patients on or after February 4, 2020, can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding. Providers can register for the program on April 27, 2020, and begin submitting claims in early May 2020. For more information, visit https://www.hrsa.gov/coviduninsuredclaim.
- Rural Providers. $10 billion will be allocated for rural health clinics and hospitals. This money will be distributed on the basis of operating expenses, using a methodology that distributes payments proportionately to each facility and clinic.
- Indian Health Service. $400 million will be allocated for Indian Health Service facilities, distributed on the basis of operating expenses.
Future Additional PRF Allocations
The April 24th announcement by HHS indicates that there are some providers who will receive further, separate funding, including:
- skilled nursing facilities
- providers that solely take Medicaid
HHS Resources Pertaining to the $20 Billion Second Tranche of Distributions under the Provider Relief Fund:
- HHS Application Portal: https://covid19.linkhealth.com/
- HHS General Distribution Portal FAQs: https://www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-faqs.pdf
- HHS Online Cares Act Provider Relief Application User Guide: https://chameleoncloud.io/review/2977-5ea0af98f0fd0/prod
- HHS First Tranche T&Cs ($30 Billion): https://www.hhs.gov/sites/default/files/terms-and-conditions-provider-relief-30-b.pdf
- HHS Second Tranche T&Cs ($20 Billion): https://www.hhs.gov/sites/default/files/terms-and-conditions-provider-relief-20-b.pdf
The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services. Although we attempt to ensure that the postings are complete, accurate, and current as of the time of publication, we assume no responsibility for their completeness, accuracy, or timeliness. The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel.
This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk. We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability. Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein. We will remove a link to any site from this blog upon request of the linked entity.
We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.
If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com. One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.
Employer Alert: CDC Releases New Quarantine and Isolation Calculator
Employee Complaints About COVID-19 Safety Protocols are Triggering OSHA Investigations
Employment Law Update: New Jersey Executive Order to Require COVID-19 Vaccination & Booster for Workers in Certain Health Care Settings and Congregate Settings